OneWorld.net (U.S.)

The first attempt to quantify the contribution and working conditions of 396 million workers in India’s unorganised sector -– which, at 93% of the labour force, is higher than in any other world economy -- has been made by the National Commission for Enterprises in the Unorganised Sector (NCEUS).

The recent study ‘Conditions of Work and Promotions of Livelihood in the Unorganised Sector Report’ says the world’s second fastest growing economy is being largely driven by workers in this sector.

The study is in line with the government’s commitment to introducing social security for this section of the workforce, whose working conditions, remuneration and living standards are far worse than their counterparts in the organised sector, though their contribution to the economy is much greater.

About 44% of all unorganised urban workers now work for India’s booming construction industry, the report says, mostly migrants who stream in from remote villages where agriculture can no longer support their growing numbers.

From road construction crews to domestic help, they work long hours for less than the minimum wage, receive no compensation for work-related injuries; and they receive no social security, says the 450-page report that examines studies conducted in several states and analyses data from the National Sample Survey Organisation.

Despite their large numbers, no agency has computed the contribution of unorganised workers to the national economy. And that contribution has been growing in recent times. “Large firms (are) reducing risks and wage costs by outsourcing to the informal sector, and the organised sector (is) not creating enough jobs,” says NCEUS member Ravi Srivastava.

The NCEUS report recommends a national fund to finance welfare programmes for unorganised sector workers, and a national board to improve opportunities and upgrade workers’ skills. Set up by the government in 2004 to recommend policy measures that would, in the words of Prime Minister Manmohan Singh, “give a new deal to the working people,” the NCEUS drafted a Bill on providing social welfare to the unorganised sector that has been pending with the government since May 2006.

In a related development, the Planning Commission of India has recommended that smart cards be issued to beneficiaries of a proposed social security scheme for the country’s unorganised workforce -- the Aam Aadmi Samajik Suraksha Yojana.

The commission recommended that the cards be issued on a pilot basis to workers who are eligible for benefits under the scheme, to prevent its misuse. “The Planning Commission has also suggested that the scheme be extended gradually to identified groups and that there should be no universal coverage,” a senior government official said.

Gram panchayats will be required to monitor the issuing and usage of the smart cards as also implement social security schemes. In addition, a central board assisted by state-level boards, will help implement and monitor the schemes.

The government wants to restrict the scheme to life and disability coverage, health and maternity benefits, and old age protection. The proposed law leaves state governments with the option of introducing other kinds of social security benefits such as provident fund, education, old-age, marriage, funeral assistance, housing and injury assistance schemes.

“The insurance package is still in the pipeline and the details have not yet been worked out. On the life insurance side of the package, we think it should be on the same lines as the Aam Aadmi Bima Yojana announced in the budget,” the official added. The government has not yet finalised how the health package will be structured.

The social security scheme will be launched under the proposed legislation for the sector, the Unorganised Sector Workers’ Social Security Bill, 2007, that will be introduced in the monsoon session of Parliament. Details of the Bill are being worked out by a group of ministers and will soon be sent to the Cabinet for its approval.

The group has suggested the inclusion of self-employed workers within the definition of ‘unorganised sector’. “This scheme will benefit sectors such as gems and jewellery, textiles, handloom and leather, which have a large number of self-employed who are without any social security,” said Jairam Ramesh, India’s Minister of State for Commerce.

According to Arjun Sengupta, who headed a committee that formulated social security policies for unorganised sector workers, around 2% of GDP will be needed to implement these schemes. At the projected level of GDP for 2006-07, this would amount to Rs 82,000 crore, or 12% of the entire expenditure projected in the central budget for 2007-08.

According to a study by the India Development Fund, an independent research outfit, a social security scheme for rural India alone would cost the government upwards of Rs 42,000 crore. “However, if India’s growth has to be inclusive and if labour reforms have to be effected, the government has to implement a social security programme,” said Amirullah Khan an economist at the Fund.

Source: Infochange